Union Brewing Co. v. Interstate Bank & Trust Co.

Mr. Justice Dibell delivered the opinion of the court. From September 9 to December 19, 1905, covering the time when the first $5,000 note and the $5,000 note in renewal thereof were executed in the name of “People’s Savings Bank, Geo. H. Simmons, Pres.” and delivered to the Trust Company, wifh the pledge agreement contained in each, George H. Simmons and he alone was doing business under the name of “People’s Savings Bank.” If any persons who dealt at that place of business believed it to be a corporation and were deceived thereby to their injury (as to which our attention is not called to any evidence in this record), it may well be that as between Simmons and such persons he would be estopped to deny the corporate character of the business. No such case is presented here. The vice-president and the cashier of the Trust Company were fully informed by Simmons before the Trust Company made this loan of $5,000 to him, and. again before the note was renewed, that he, and he alone, was doing business under that name. As between Simmons and the Trust Company the case stands exactly as if the instruments had been signed simply “Geo. H. Simmons.” There was no corporation named “People’s Savings Bank.” Simmons was not president of any such corporation. These facts were well known to the vice-president and to the cashier of the Trust Company when they made this loan and when they renewed it. Those words in the signature were fictitious, or were assumed for business purposes, and were well known by said officers of the Trust Company not to represent any fact. The-words “Geo. H. Simmons” in the signature were all that was actual and the officers of the trust company knew that fact when they accepted the paper. The agreement to hold said note for $9,472.32 as collateral security provides that it is held, not only for the payment of that note, but also as security for the payment of “any other liability or liabilities of ours to said bank due or to become due or that may be hereafter contracted.” It also provides that when the collateral has been reduced to cash the Trust Company shall “pay any, either or all of said liabilities,” out of the proceeds of said collateral. We fail to see how language could be employed to bind said collateral note more fully for all other liabilities which Simmons then owed the Trust Company or which he might thereafter contract with it. The word “ours” in the phrase “liability or liabilities of ours” is plural, it is true, but even if the People’s Savings Bank had been a corporation, the singular number would have been the proper one to use unless the other liabilities were also intended to be secured. These words in the form are printed, and obviously the printed blank was so framed with the intention that it should be equally binding whether signed by one person or by more than one. We are of opinion that Simmons was the only signer of these notes and agreements pledging collateral, and that they secured all the notes which the Trust Company held against Simmons at .the time they were executed. Such an agreement to secure not only a particular debt but also any and all undescribed indebtedness was supported in Buchanan v. International Bank, 78 Ill. 500; Walker v. Abt, 83 Ill. 226; and Bartelott v. International Bank, 119 Ill. 259. The second pledge agreement had been executed and delivered by Simmons to the Trust Company before Kelley became his partner under the name People’s Savings Bank. The indebtedness from the Union Brewing Company to Simmons under the name People’s Savings Bank had therefore been pledged to the Trust Company for all of Simmons’ debts to it before Kelley had acquired any interest in the assets of the business conducted under the name People’s Savings Bank. The subsequent partnership gave him no interest in the debt so pledged, as against the claims for whose payment it was pledged. The fact that the note of the Union Brewing Company so pledged and deposited as collateral was afterwards renewed, and the time of payment extended, and the new Union Brewing Company note substituted for the one previously held in pledge, and that this substitution, though dated before the partnership, was not actually effected till after the partnership, does not alter the rights of the Trust Company. The debt which the Union Brewing Company owed had been pledged before Kelley went into the business, and the mere giving of a new note in substitution for the old did not pay the old debt nor create a new debt in which Kelley had an interest, as against the claims for which it had been pledged. Each pledge agreement expressly provided for substitutes for said original pledged note. We are therefore of opinion that the Trust Company was entitled to a decree for the payment of all of its notes against Simmons out of the fund in court. Those debts exceed the amount of the fund pledged, and there would be no surplus for the trustee in bankruptcy. The decree is therefore reversed and the cause remanded to the court below with directions to enter a decree in conformity with this opinion. Reversed and remanded with directions.